Navigating Challenges: Chris Burrow's Lessons in Flipping and Risk-Taking

"Hello and welcome back to another episode of the Collective Clicks podcast. This is your host Brandon Bateman, and today I'm going to be joined by Chris Burrow. Chris is a rehabber, wholesaler, innovator - whatever you want to call it - outside of Atlanta, Georgia. He has been crazy successful in his past five years in business and learned tons of lessons along the way. We're going to talk with him about what he's learned about seller appointments, different marketing strategies, and exit strategies that have brought his business to the next level.

How you doing today, Chris?"

"I'm fantastic. How about you, Brandon?"

"Hey, doing fantastic. Thank you. It's awesome to have you here. I'm super grateful for the time that you set aside for this podcast. I think an awesome place to start would be in your own words - can you describe what you do and a little bit of the background, how you got into it?"

"Sure. My background is door-to-door sales, and I've tried to start many businesses and failed at many launches of businesses and scaling those. Ultimately, it was just kind of in a place of desperation. I came across wholesaling through a lot of the podcasts that existed at the time and the information that was out there. I thought I would take a swing at it and luckily found something I ended up being really good at. I just feel really blessed to be kind of part of this business and all the opportunity it provides."

"Yeah, that's fantastic. You know, it reminds me of our mutual friend Cody Hofhein when he was talking about how you can pound doors on insurance all day, but it's not the opportunity vehicle for you. I'm sure you learned a lot of things from door-to-door, but it's great to kind of level up those skills into something that's a little bit more lucrative."

"Yeah, I think that experience helped prepare me for some of the opportunity that came our way. I've been told 'no' a thousand - more than a thousand, a million times - so it's been good to build kind of that muscle and work that out. But yeah, when we met a couple of years ago, we were ready to kind of take things to the next level. You've been super instrumental to the growth of our business, and it's been a pleasure getting to know you. Looking forward to talking through some of this stuff."

"Yeah, I'm just super impressed with what you've accomplished over this time. You went from - well, I think you - I always look back at myself like a year ago and think what an idiot that guy was and I can't believe I'm like embarrassed that I ever was that person. I think you're - I don't think you're probably exactly the same way, but I know that you, as I see it, have come a really long way as a person, like as a business owner and in terms of your success. You want to share a little bit about what you guys have been able to accomplish in your business in the past year in terms of whatever you're comfortable sharing like deals, revenue, and what the business looks like from a team standpoint? Like those kinds of basics?"

"Yeah, absolutely. Last year was our biggest year. We've been fortunate enough to grow year over year. We've doubled our revenue and our deals and our business, so we always set these lofty goals and we figure out in the moment how do we get there. You know, the path isn't always super clear, but we know that we've got the ability to get there. So last year we ended at 83 deals. That was 3 million - 2.985 in gross profit or revenue. This year our goal is 180 and that's 8 million. Some of those are going to be rentals, but that's been over the course of five years. So we started in February of '18, so we're a little past the five-year mark now."

"Yeah, that is crazy impressive, especially in a competitive market like Atlanta that you're in, to be doing those kinds of numbers. That's fantastic. And I have my personal beliefs on some things that have contributed to your success just based on conversations we've had and based on what I understand about you, but I'm really curious to hear from your side. As you've looked back and you say these are the things that made a major difference in my business - I'm sure there's several of them - but what would you say contributes most to that growth that you've seen over that time period?"

"Well, I think - I don't think I chose this, but there's been multiple times where I've been very humbled in the business and just where - like our first year in, we did 35 deals. I think we made about 350 grand that first year. Well, I was feeling pretty good about myself, pretty proud of myself, right? And I had the opportunity to meet other people that were doing, you know, twice that. So me and you met, I think, at the beginning of '21, and I actually had a conversation with Cody Hofhein. I went to Cody's scale event and once again walked in kind of like - I don't want to say arrogant, but a little bit complacent and proud of myself, like, 'Hey man, maybe I've arrived.' And once again got kind of dished a huge slice of humble pie. And so Cody actually challenged me at that. He said, 'Hey man, act like you belong here. Like, you've got so much more potential. Like, dude, the sky's the limit. You can go get it, but dude, you're not there yet. Like, go accomplish this.' And so I've taken those moments to heart and really kind of made it part of our core values for the company. One of those is growth, and so if we're not always striving, achieving to be better and achieve more, then we're complacent. And what I found is - I don't think you're ever gonna arrive, but I've looked - hey, I guess maybe you were wanting a thing of like, 'Hey, we've used this tool or that tool,' but that humility and that striving for growth and learning new things has kept us pushing in a direction that's been positive."

"Yeah, that's fantastic. And I do remember that event because I think that's where we met, and that was - yeah, over two years ago, I think now. I can't remember where exactly it was, but it's been a long time."

"Beginning '21. I'm glad you know because I don't."

"So yeah, maybe two and a half years or two and a quarter years from now, which is crazy. So that's one humbling point, but you referenced that there are multiple. Were there other points that were kind of humbling to you throughout this journey that you've had?"

"Sure. I think there's times that we fail on a flip. I'm a little overconfident. One of my friends said if you've never lost money on a deal, you're probably not taking enough risk. But obviously, we try to limit those. There was one last year that - I used to set foot on every single piece of property we bought and we flipped. As we scale, it's impossible to go to every single house, so we rely on photos, we rely on information from acquisition managers. And ultimately, the decision came down to me to purchase a property. On paper, man, it looked like we were gonna have a huge - we thought it was maybe a double or triple. We'd make maybe 125 grand with the projection. In the end, we lost 60. And that was the most money we've ever lost on a flip. And it was once again one of those moments of, 'Man, you made' - we can look back and say, 'Hey, we made these three critical errors in the process,' and it really shaped the way that we do our underwriting on our flips as we're purchasing properties. So we've put some safeguards in place because of that specific event. And once again, like it - and I have to answer to the team also. I have to look at people and say, 'Guys, this was on me. I made the mistake, and because of that, now we're doing this, and here's how we protect.' It's not just my income; it's the income of our team. Like, we've got - I think 13 employees at this point. They all have spouses and families. So anytime we make a critical error, it's not just affecting my pocket, man. It's putting everybody's livelihoods in jeopardy. So it's a much, much bigger deal than just, 'Oh, we lost a little bit of money.'"

"Yeah, I understand. That's crazy. What was - if you don't mind me asking, what was the critical error that led to that big of a discrepancy between what you thought you'd make and what you actually did?"

"We went back and looked at the photos that the acquisition manager took, and this is not on him, but the photos show the house that looks like it's very secluded. There were two or three points where we had an opportunity to identify that this house was actually in the front yard of another house. So like, literally, I don't know, 40 feet away is another house. They both have a shared driveway. At no point in our purchase and leading up to that did we know it was a shared driveway, and it really looks like it's in someone else's front yard. And we're thinking about, 'Hey, this is a super premium flip.' It was a higher price point. It was also in a county that was way more rural. So we did too high of a price point in a rural county, and those things compounded to equal a big failure."

"Yeah, that's a bummer. I guess learn from it and move on, but that's crazy. Well, super helpful to know some of the things that have been influential for you over the past, Chris. Let's just say we were to look at a little bit more skill-based, right? Because I love the humility, but I'm also curious because I'm sure that humility's kind of led to a lot of different skills that have served you really well. When you look at kind of where you are now and the things that you are good at that are contributing to the success that you're having, compared to where you were before, what are some of those things that are the biggest change? Like before we were doing this, we're doing that, and now we're doing this, and that makes a difference for us."

"Yeah, the temptation in this job is to walk into a property and feature sell, and that can be, 'Hey, we're the fastest, the easiest, the best. You know, we have a five-star rating,' or to try to convince someone that we have the best price or the best offer. And that's also feature selling. And as salespeople, so if you're coming from car sales, insurance - I came from door-to-door - that's what we're taught is, 'Hey, our product beats this other product by X, Y, and Z.' And when I try to use that in this industry, I fail. We have a sign downstairs in our office that says 'Get Real,' and what that means is, 'Hey, let's cut the BS. Let's stop trying to talk fast. Let's approach this opportunity, let's lower the walls and just get real with people. Let's get transparent.' And so that starts to encourage some vulnerability. And it really occurred to me - there were two moments that I can tell two stories. I'll just pick one. Is it okay to tell you a story of when I had this like realization of what this job is actually about?"

"Of course."

"When our industry really should be about - there was a lady that called me that said she needs to sell her house quickly. She was facing a foreclosure, and this is coming up in like two weeks. I talked to her a little bit on the phone. I asked if I could come out and see the house, and she was very, very apprehensive to let me come to the property. It took almost 30 minutes for me to convince her, 'Hey, it's okay. You know, I - there's no judgment.' I wasn't exactly sure what I was going to find when I showed up. I knew it wasn't going to be good, but I showed up to this property, and it really looked - we see a lot of houses that look abandoned. This one really, really looked abandoned. The yard had grown up so much, like the weeds turned into trees kind of thing. The stairs had rotted out going up to the stairs. I knock on the door. She opens the door, and she's in a wheelchair. And a lot of the houses that we go to and the people we meet with are somewhat unaware of the condition that they live in. So you might find a house that has, you know, the dog has used the bathroom all over the house. People aren't fully aware that that's not how other people live, and so sometimes there's just this like - they're just unaware of how other people might perceive the way they live. That was not the case here. So she opened the door, I step in, and there was a smell that hit me that I've never smelled before. It really very much smelled almost like a dead body. Like that's the only way I can describe it. I don't even know what that smell is like, but it's the only thing that hit my mind. And I looked at her, and on her face was shame. I mean, just pure shame. And that was different than what I'm used to. Like I said, most people aren't fully aware of how bad something is. That was not the case here, and she was so embarrassed of this house and her condition. And so I made the decision right there, like if this was my mom sitting here in this wheelchair, how would I treat her? How would I want someone else to speak and treat her? Am I going to try to make her feel bad about this and feel extra shame? She's already feeling it, so that's not the purpose. The purpose is to help her feel some dignity and that she should be treated like anybody else. So I stepped in, I'm wearing sandals - I don't want to get too graphic, but I stepped into carpet that - this lady had a medical condition where her legs leaked fluid, and she's literally been confined to this property for 10 years. She's not left the house once. Once a week, her daughter would come and deliver a case of Coca-Cola and a pizza. And so all of this is in this house, including what I'm stepping in. And there's just nowhere to sit, so I'm like, 'Hey, I'm just gonna kneel down beside her.' And that was like the moment clicked that I needed to hear her story. If I needed to get real, 'Hey, let's talk about it. We both are aware of what the situation is, but let's figure out a solution together.' And so it was this moment of like, I don't have to tell her who our company is. I don't have to show her reviews. I don't have to, like, you know, put our competitors down. It's not about any of that. It was about treating her with respect, hearing her situation, and really getting real on what needs to happen next. Can I provide that solution that really makes a difference in her life? And we were able to do that. We bought the house. We got her into a one-level, like single-level apartment where she can actually get out of the house. She was able to buy like a wheelchair-accessible van with the money from the sale of the house. And it really solved a real problem. So I feel like that's the difference between how most people approach it and what it really should be about. And it's about letting them tell their story."

"Yeah, that is really neat. So would you say you put more emphasis on like the rapport building part of the sales process than other people would?"

"I actually hate that word. I hate rapport because people feel like the temptation is if someone likes you, they're going to sell us their house at a great price. It's not the case. It doesn't matter how much people like us. It does matter how much people trust us, and the only way that people trust us is by us allowing them to get vulnerable with us and kind of vice versa. So we try to not focus on rapport. I know it's a semantics issue a little bit, but we try to not focus on rapport because that insinuates like I want someone to like me. No, we want people to trust us."

"I understand. That's super interesting. So you understanding that and you having that experience obviously changes your mindset around this, but I know you're not running out there into sellers' houses that often these days, right? You have a team of people who are doing that, who are kind of held accountable to using that process. So how do you take this insight that you have about like, this is what acquisitions is really about, and have your team reflect that in the way that they're doing their appointments?"

"I think there's a moment for everyone where it clicks, and the stories do help, like that story and the other stories about where we realize - I actually tell my team, if you walk out of the appointment and they say, 'Hey, hold on before you go. Robert, what's your last name again?' or if they say, 'Hey, by the way, what's the name of your company?' That's how you know that we've done our job the right way because we've not made it about us. So it does take some time, and I do think it's kind of the anti-sales approach to this job. We don't want like - the more we're talking, the more we're losing, the more it's not about what it should be. It really should be about the person we're sitting across from."

"You say it takes some time. When you started thinking about your appointments this way, do you have any idea like how things shifted in terms of how long you would spend at the appointment?"

"That's a great question. It really - it's going to extend the appointment, and there's just no way around that. If you're there for less than an hour, you're not doing the right thing. You're not - it's not going to be effective. Now, you might walk out without a contract in less than an hour, but we all know that there are things that arise that create challenges like getting a contract to closing. If you spent less than an hour, you're borrowing trouble. You're asking for trouble later on because it's not enough time to build that connection. So it really pushes into the like two-hour, really close to two hours or more sometimes, of an effective, meaningful like relationship and appointment."

"Yeah, that is - yeah, that's a long appointment. I don't think a lot of people think like when they first get into this, like I'm gonna spend two hours with sellers in their houses. But that's - yeah, that's insane. But I do have other clients that do that too in terms of like their amount of time that they have in appointments, but it doesn't seem like it's the norm by any means that I'm hearing from people. How do you - obviously one aspect of that is making sure your acquisitions team isn't too rushed. How do you kind of figure that out in terms of is this like a certain number of leads that people are allowed to manage that allows them to do that? Or is it gaps in between when the appointments are scheduled? Like, how do you make sure your team doesn't fall to that pressure of 'I've got to keep on moving, I gotta go get more contracts'?"

"We space out their appointments. Our acquisition managers are really only responsible for being in the house and negotiating. We're not asking them to lead gen. We're not asking them to cold call. Their only responsibility is running two up to three appointments a day, and that is it. So we've separated the follow-up. We've separated the appointment scheduling. We've separated a lot of the stuff so that they're singularly focused, and they know their only opportunity or their best opportunity is when they're in the house. So the quicker you get out, the less likely you are to have a deal."

"Yeah, I mean, when you say that, I totally get it, right? If I'm an acquisitions manager and I've got two, maybe three appointments today, and that's literally my entire job, I don't do anything else, I'm going to invest some time into that, right? I'm not going to just be in a rush running from one to the next because if I wasn't, I'd have an extra four hours that day to do something else."

"That's exactly right. And there is a balance between having too much and not enough, and we're still figuring all of that out. We're not perfect. We're still a young company, but I have found that that's been the most effective. Once we added a lead manager that is the first line of response to an inbound lead, and they're working on getting some of the motivation out and scheduling an appointment, making that separation has made a huge difference in our conversions."

"Yeah, that's fantastic. It's good. I mean, people struggle to do multiple jobs, right? If you don't have a lead manager, then your acquisitions manager is your lead manager, and they might not be good at both jobs. It could be different. I, you know, I don't know how other companies and wholesalers are doing it. The thing I hear the most is they're asking their acquisition managers to cold call. So they're generating the lead, now they're responsible for maybe going out and seeing the property and negotiating, and then sometimes there - I mean, there's other responsibilities of getting it to closing. I just don't see how that's a scalable operation by any means."

"I haven't heard that very much myself in terms of like acquisitions managers cold calling. The exception is - I do know companies that do it to keep their acquisitions managers like hungry, if that makes sense. Like they have a certain amount of like self-prospecting that you have to do in a week, and it's not a ton, and it's not even going to generate that much business, but it makes them appreciate the warm leads that they do get, if that makes sense. Like it keeps them, you know, keeps them grounded so they don't become that person that just thinks that like every seller owes them the house because they're just so high and mighty and willing to meet with them, you know?"

"Yeah, there is - there's something to be said for people, you know, hustling or at least having the perspective of how hard it is to generate a lead. Like you've got to be able to know - like it's one thing to look on paper, 'Hey, we spent 250 bucks on the lead,' but to feel how much effort it takes to generate that same lead if you're cold calling - like yeah, I think there's maybe value in that. Maybe we'll add that to our training."

"Yeah, I don't know if it's a good idea or not. I know people do it, so I don't - yeah, I don't know what to - I don't know what to tell you, but I do think there's - I do think there is some value to that. And they obviously would commission them significantly better on leads they self-source. That's an important piece of it too, not just a lot more work for no benefit."

"So I'm curious to hear - oh, sorry, go ahead."

"Oh, I was just - yeah, I was just gonna agree with you that I think most of the people that get into the like the paid lead generation - you're paying for leads - very quickly abandon having their acquisition managers like generate leads. It's just not a very efficient thing. But I think - I mean, I think that's actually the majority of your local wholesalers or investors out there. I think they're trying to do that. They just are either misguided or - I don't know specifically."

"Yeah, that is - yeah, I agree with you. Let's talk about marketing. This podcast is a little bit more focused on marketing than anything else, obviously because that's something I know more about than anything else, and I'm practically useless in every other area. So I'm curious to hear about your marketing journey because you say you've been at this for about five years. You're too humble, Brandon."

"Humble or actually dumb in other areas is also a very plausible reason why I would say what I just said. But I'm really curious to hear like your whole journey you've gone through and what has worked for you over time. I know - is it five years? Have you been doing this? Did I hear that right? So I imagine things have changed majorly over that time period, both in terms of like your market, in terms of how you're running as a company, and also in terms of the marketing that you're doing. I'd love to learn a little bit about that journey and some insights that you've learned along the way."

"Sure. '18 and '19, we started at the beginning of '18. '18, '19 were primarily like outbound, just hoofing it, generating the leads, closing the deals. I was a one-man band operation. We started off wholesaling because I didn't have - it literally did not have a penny to my name on that first wholesale deal we ever did, and that was five grand. That five grand got us into the next month, and then we did 10, and built from there. But yeah, we transitioned into flips, like whole tails initially, and flips getting into '19. And for some reason, the fall of '19, I kind of had the idea that, 'Hey, we need a website.' We didn't even have a website. We didn't have a brand. We'd have a website. We had an LLC, but that was it. So one night, you know, just picked a random name and built a Carrot website and launched that. And I think we turned on some ads with another company, but it was very, very like ineffective. We were spending like a very, very low amount of money, and I didn't see any results from that. And then COVID hit. We're moving into 2020. We were doing a lot of foreclosures, and that just dried up overnight. There were moratoriums. All of our outbound stuff just kind of like tanked immediately, and we shut down. We sold everything we had, all of our inventory, all the flips that we were doing. We sold everything, and we went to zero. And I was anticipating the entire real estate market crashing. I was, in fact, convinced it was going to happen. And from March to June, kind of sat on my hands and sat on the sidelines waiting for something to happen or waiting for a sign. And I eventually got tired of doing that and said, 'Hey, I need to learn digital marketing,' or 'I need to learn how do we build this business back up without the outbound stuff that we were doing.' We turned our ads back on, and I was kind of riding solo. I didn't - me and you had not linked up at this point. We turned on some random

"We turned on some random ads. I didn't know what I was doing, but we knew the importance of it. So we started - we started getting deals, started scaling. At Texas into '21, when we met, and I handed you the reins and you cleaned up a lot of stuff for us. So luckily, we were able to rebuild the business from zero again, just with a different strategy. And now that, you know, there are some foreclosures and we're doing a little bit of outbound now that we have that back, it's kind of - now that a cornerstone, a cornerstone of the business and the lead gen is inbound. That's our philosophy. We've been able to do more."

"Yeah, that's really interesting. Really interesting story, Chris. So what would you say if someone's thinking like inbound versus outbound, what should I focus on? What's your opinion on different things that you could think through? I know for you, you've chosen to focus more on inbound, but I'm also really curious to hear in what situations you think focusing on outbound could make more sense than inbound, and then where are people getting that wrong?"

"It's the ultimate question of what do you have to give or trade - is it time or money? Initially, I didn't have money, so it had to be time. That's the only way possible. And I think that helps you learn the ropes and learn what works. So when there's low, relatively low stakes in messing up an appointment, messing up a negotiation, it's not like, 'Hey, we've got 15 grand invested into this thing that should convert.' So it helped me work out some of the kinks of our operation and learn how do we negotiate. But it's not a scalable thing. I really - I disagree that you can have a million boots on the ground and run a large-scale cold calling center. I just - I'm sure there's some people out there, but it is not a fun thing for me. It is the ultimate form of like torture to think about running a cold call center or team. And I said, you know what? I would much rather pay a little bit more money for a deal and not worry about that and let's just talk to the people that actually want to sell their house and talk to us. And just honestly, skipping that step, I think, accelerated our growth tremendously. I think people end up here anyways. We just happen to like make the right decision out of me hating cold calling honestly."

"It's probably one of the biggest motivations people have for talking to us. I was just talking to someone earlier today. It's like, look at all these great things I've accomplished with cold call. They're just saying they made like nine million calls last month or something like that. It's like ridiculous numbers of cold call, and they're like, 'I absolutely hate it. Please save me,' because it's a grind."

"Well, on the topic of inbound, obviously there's different channels that are inbound. One thing that I've always appreciated about you is in the two and a half-ish probably years that we've worked together, you've always been a consistent investor in SEO, which for a lot of people, it's almost like this weird elephant in the room of marketing for real estate because everybody knows that it matters, but nobody wants to do it because it's this long-term game. So I'm really curious to hear for you what your journey has been with that channel compared to the others, just because it's - if you ask me, it's underutilized, but it's also - a lot of people really struggle. I think if people knew that SEO has a return for sure, then it wouldn't be as hard. But anytime you increase the amount of time between when you have to put money out for something and when you get the reward back, it also increases the perceived risk of 'Will I actually get it back?' And that's something that a lot of people struggle with. So really curious to hear your thoughts on that."

"It is the one channel that I guarantee has kept us in business. Everything else fluctuates. There's six months to a year that's really great with AdWords. Facebook has fluctuation. There's lots of fluctuations in the business, but the website SEO has been so consistent in the returns. If we had not started when we did, if we didn't invest that money, we would be - I'm sure like I - I'm not saying we'd roll over and give up, but it's helped us really, really make the numbers work. I was actually thinking about this earlier. We looked at our returns. We're at like a 2,000 percent ROI, like a 20x return. So dollar for dollar spent on the SEO versus what we get back, and that's still probably conservative. We've made millions, literally millions on organic SEO search terms. And in a market like us, I mean, it's hard to rank. It did take time, but that money - there's no better investment."

"I'm so glad you see it that way. That's fantastic, Chris, because the other thing is, let's just say you did roll over at some point in this time, you'd still get SEO leads, right? That's the other thing that that doesn't include, right? Because when people calculate SEO returns, they're looking back at like the last two years, and they're looking at how much money did I spend, how much I make. But it doesn't include like if you stopped investing in it right now, what's all the money you could make in the future from it, you know? It's the leads that are still consistent even - like obviously, you want to be consistent with your investment because otherwise, it will kind of trail off over time. But I think that's like - there's no other marketing channel that works like that where you just turn it off and it still generates leads. It's crazy."

"It does take some blind faith, especially if your cash is tight. But you got to make the sacrifice. I mean, it's like a savings account. It's like an insurance policy for the future. You're going to wish you did it now. And I - I didn't even track it honestly, like the first year, year and a half, like we weren't - I wasn't expecting anything. I think you did a great job of setting my expectations the right way where I did - I expected nothing off of SEO. We only counted - we only like ran the dollars and cents based on PPC and all of that. Obviously now we track those KPIs, and it's - it's ridiculous the return that we get. And they're the fattest deals too. I mean, they are - they're the absolute best, biggest money-making deals that we get. So thank you. I owe a lot to you for helping us get there."

"Yeah, I'm - and I'm super grateful to you as well, Chris. It's awesome that we've worked together for so long, and yeah, I definitely think of you like one of the people that's been instrumental to our success and be able to figure things out. Because two and a half years ago, we started working together. You were one of our earlier clients in the real estate space. We technically had been working with Cody five years or so, but only with them for a little while. And then we started getting some other referrals after that, and then some other referrals after that. And you were - you were in that - you were in that chunk somewhere before I decided to go 100% in on real estate and only do that. So I'm really grateful for you kind of supporting our business to the point that we could decide that this is all we want to do, and we could afford to cut out all the rest and decide to just double down here."

"One other thing - like this is - this is like common digital marketing philosophy, but I don't think - I don't think it's like well accepted in the real estate space. But whether you know it or not, and you probably know it, it really embodies kind of the way that you think about things, which is this concept that whoever can afford to pay the most money to acquire a customer wins in most marketing scenarios. And that's something I really respect about you. I mean, it doesn't take a lot of math for somebody to kind of go backwards and realize like your spreads are pretty good based on the amount of revenue you have and the amount of deals that you do. And you've taken a little bit of a different approach than a lot of companies have in terms of really focusing on exit strategies that maximize the potential value from the deals more so than the quick cash conversion cycle. I'm really curious to hear why you decided to shape your business that direction and what you think someone else should think about when they're thinking about like, should I mostly wholesale? Should I flip? Should I do novations? Like, what is the right - even though no such thing exists, but like, what is the right strategy for them?"

"We saw our cost per conversion or cost per deal start to rise. So tracking back to '19, on the PPC side, I think it was averaging around five grand, and we were primarily wholesaling at that point. So our average profit per deal was in the 15, upwards of 20,000 range. So the cost to acquire a deal went from five and crept towards ten. Well, my profits stayed at that like 15. And it's not - it's not - for me, it was - it didn't make any sense. So I thought, okay, well, how do I like triple or quadruple the number of deals I'm doing? And I was like, 'Hey, I'm not thinking about this the right way. What if I continued to do the exact same amount of deals but I tripled or quadrupled the profit I made?' And that's - that was the spark of like, I have to stop wholesaling. It's just not - in my market, it is not a profitable proposition."

"So the next logical step was whole tailing, where we still take title on the property. We know that, hey, if we take it to MLS, that's your - that's the biggest buyers list. Hey, guess what? I have to do like half the work now. I don't have to worry about having a dispo team or department or manager. Like, I can literally take it to MLS. It's going to sell for way more than my buyers list. And we were selling at a much higher price. So now I doubled my returns. Now I'm making 30 to 40 grand a deal and doing less work. So it's this natural like transition of, okay, now I have the capital to flip. Okay, now our profits - we're averaging 60 grand every time we flip a property. So it was a natural like evolution of gathering all these exit strategies."

"And I don't know that someone can go out and say, okay, I'm going to start with like five exit strategies and be good at all of them. I do think it's kind of a natural process. But we've been lucky enough to develop these, and it has led to novations. We added novations in the fall of - 22. Someone mentioned the word to me. I was like, 'I actually have no idea what that means. I don't - I really am not following what you're - what you're talking about.' We went through Eric Brewer's Novation course, learned exactly what this method is. Do you want me to talk kind of talk a little bit about novations and what we found?"

"Please, yeah. I think - I think I would love to hear that because so many of our clients are looking to add them, and so many are already kind of in that process. But I think a lot of people are in this stage where they've done like a novation or two amongst our clients, and they like know it kind of and sort of have it available as an exit strategy, and they kind of know what it means and they get why it's valuable. But but like actually steering the ship and getting that happening at scale is a really hard thing to do and something that I think you've done pretty good at. So I'm really curious to hear, you know, your whole - your almost back perspective on it."

"In the fall, I think we made about 325, 350 grand just on novations. And whereas other people were having a really, really bad fourth quarter of '22, we excelled. We've made more money than we've made because of this additional exit strategy. What that's looked like for us is when we're walking into a property where the numbers just don't line up for whatever reason - maybe their payoff is too high, maybe our negotiations stall and fail - this gives us one more opportunity to do a deal at a higher number that we really should not be putting our money on the line for. We should not be taking title, buying the property, and taking this much risk for a percentage that is not a sound investment. We have to stick to certain percentages if we're going to take on all this risk."

"So novations allow us to pay a higher price, but we're not assuming all the risk. If the market tanks, we're not the owner of the property. So it's - for me, it's a fancier form of wholesaling, but it gives us the same advantage of going - using a whole tail to go on market with MLS. It also allows us to do higher price properties. So we really stay away from your million-dollar properties here in Atlanta. Like our median price is like 350, 375, something like that, you know, a little flip. Million-dollar properties - but it's a lot easier if we're not taking title, if we don't have the holding costs of a million-dollar property to pull 50, 75 grand. That's a much easier proposition in that price range. So it really allows us - like there's a solution for everyone that calls us, and we're taking a shotgun, a much broader approach. We're in lots of houses. We really have something for everybody."

"Yeah, and I think - I think when it comes to exit strategies, you kind of alluded to this, but I'm curious how you would think through what do you do and what do you not do? Because the - if you just think about it theoretically, more exit strategies is always going to be better, right? Because you do have a solution for everybody who calls. However, in practice, that's not always true because you're not going to be great at every possible exit strategy. It's hard to train your team on all those things. So there is really this kind of fine balance to strike. So with somebody like - wherever they're at in their journey as a wholesaler or flipper or whatever the case is, how do they know like for them at this point, are novations a shiny object or are they a good strategy to implement? And so they don't like stretch themselves too thin - like at what point is - at what point is it the right fit?"

"I think the rehab part is maybe the part that you should save for last. That's a whole different skill of knowing - managing a construction team and a renovation. More people get that wrong. I think it'd be way more beneficial to add novations on the front end. So if all you had was whole tail, like wholesale, wholesale, novation - man, you can do 90% of the deals out there and still make money. So can you squeeze every penny out of a property that should maybe be renovated? No, but you don't have to. Who cares if you're making, you know, 60 grand instead of 80, and you just saved yourself three months? Like that's a - that's a win. It keeps your - you know, keeps capital in your pocket. It prevents you from taking, you know, exposing yourself to too much risk too quickly. So I think it's a great building block, a tool that helps you like learn the market, learn what things are selling for in your market with very little risk."

"Now, the flip side is we really have to be careful. I think novations - I think there's going to be some regulation with wholesaling, and novations have the potential to get really messy really quickly. I think we as investors have to encourage the community to be very responsible with these. The more irresponsible we are and the more promises we make that we can't keep - like, it does nobody a service. So we don't need to be lying to people and saying, 'Hey, you know, I - I'm gonna get you this,' and we, you know, we're taking it to market trying to innovate, and it doesn't happen. It's just - I think it has the potential to get people in a lot of trouble. So I would - I would actually say if you're going to do novations, I highly recommend Eric Brewer's Novation course. I would not recommend you winging it and just figuring it out as you go. It's one of these things that you can get yourself into trouble more so than any other exit strategy. I would recommend spending the money to go through that course and learn how to do this the right way."

"Yeah, and it's actually pretty cheap, isn't it? Like five grand, six grand, something like that?"

"Five to ten. I don't know exactly where - where it lands, but it's worth every penny. If that's a barrier of entry, you probably shouldn't be doing this anyways. So that's how you know - if you can afford the course, then you're ready. It comes down to you not being able to pull the trigger on that - you're maybe not - maybe not ready."

"I'll give you an example to not - not be around the bush. I'll give you an example where it can potentially get messy. We have an agreement with your - with our original seller. We have an agreement for a price. We're carrying out the novation. We've listed the property, and now we have an agreement between seller A and our end buyer, buyer C. Well, if the seller decides they no longer want to sell, there's a - there's a contract there. So like ultimately, when someone backs out on us, well, we get to decide are we going to sue - we don't - we don't do that - but are we going to sue? Are we going to like pressure them to follow through? Like it's in our control. Well, we have a third party buyer on the line that - hey, if they decide to sue seller A for backing out of the deal - like now there's"